Life premium collections down 2.33 per cent in H1-FY'13

The total premium collected by life insurance companies in the country decelerated by 2.33 per cent during the six-month period ended 30 September 2012, compared with the previous period ended 30 September 2011, the Insurance Regulatory and Development Authority (IRDA) said today.

The reasons for a negative growth in the premium collections are the same factors that are influencing the financial sector as a whole, minister of state for finance Namo Narain Meena informed the Lok Sabha in a written reply today.

She also quoted IRDA figures to show that out of the total 4,41,91,864 life insurance policies issued in the financial year 2011-12, about 1,39,83,265 constituting 31.64 per cent of the total number of policies, were issued in the rural areas.

In addition to this, she said, life insurance companies together covered 1,45,31,183 lives from social sector groups, including unorganised sector, economically vulnerable or backward classes and informal sector groups during the year 2011-12.

Further, the Government of India has launched following social security insurance schemes especially for rural and urban economically backward people:

  • Aam Aadmi Bima Yojana (AABY)
  • Janashree Bima Yojana (JBY)
  • Rashtrya Swastha Bima Yojana (RSBY)
  • Mahatma Gandhi Bunkar Yojana (MGBY)

IRDA has issued IRDA (Obligations of Insurers to Rural and Social Sectors) Regulations 2002 wherein every life insurance company should fulfill the norms towards its obligations (percentage of policies on the total number of policies written direct in that year) in the rural and social sector.

As per IRDA, 26.84 per cent of the total policies issued by private insurance companies during the year 2011-12 were issued in rural areas.

The IRDA, meanwhile, is in the final stages of issuing guidelines on investment limits for insurance companies in the next couple of days. Sources said, IRDA is expected to cap the debt portion of the investment by insurance companies at 55 per cent, against the current 85 per cent.

Officials dealing with the regulation said for investment assets, including unit-linked insurance plans, IRDA would reduce the exposure limit to a particular sector from 25 per cent to 15 per cent.